EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1007947
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Ford Motor Co applied for a TCO in respect of certain internal combustion engine valves on 15 February 2010.
Instrument
TCO No 1007947 was made on 23 April 2010. It declares that those certain internal combustion engine valves are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1007947 is taken to have come into force on 15 February 2010.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 1007947 was enacted in 2010 under the Customs Act 1901 to address the issue of tariff concessions for certain goods imported into Australia. This instrument was introduced to provide tariff relief for specific goods that do not have Australian-made equivalents, thus ensuring that Australian businesses remain competitive in the global market. The instrument was developed by the Chief Executive Officer of Customs in response to an application from Ford Motor Co for tariff concessions on certain internal combustion engine valves. The primary objective of the instrument is to allow for the importation of these goods at a lower rate of customs duty, in this case, free of charge, thereby facilitating economic activity and potentially lowering costs for businesses that rely on these imports.
The Tariff Concession Instrument No. 1007947 was implemented to ensure that the rights of importers are positively affected without disadvantaging any other party. The instrument came into force on the day the application was lodged, 15 February 2010, and it does not impose any liabilities on any person other than the Commonwealth. Additionally, no submissions were received in response to the published notice inviting comments on the proposed concession, indicating broad acceptance or lack of opposition to the tariff relief provided by this instrument.
Scope and Application
The Customs Act 1901, as amended through Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, facilitates tariff concessions on specific imported goods, thereby reducing the customs duty rate. This Act applies to entities and individuals involved in the import of goods that are eligible for tariff concessions. These concessions are applicable to goods that are not produced in Australia in the ordinary course of business and do not correspond to substitutable goods, as defined by the Act. The geographic scope of this Act is national, covering all jurisdictions within Australia. Importantly, the Act does not disadvantage any person by affecting their rights as they stood before the application date of the TCO, nor does it impose liabilities on individuals or entities for actions taken prior to the registration of the TCO. The application and effectiveness of the TCO are communicated through notices published in the Gazette, inviting submissions on the proposed concession, although in practice, no objections may be raised. The TCO in question, concerning certain internal combustion engine valves, came into force on the date the application was lodged, allowing for immediate tariff benefits for importers.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1007947 under the Customs Act 1901 (section 269F) permit the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) for certain goods. These sections include 269C, which details the core criteria for a TCO, and 269P(3), which stipulates the process for making a TCO if the core criteria are met. Specifically, section 269C requires that no substitutable goods are produced in Australia on the day the application is lodged. If the CEO is satisfied that these criteria are met, a TCO is issued (section 269P(3)), as was the case for Ford Motor Co's application for internal combustion engine valves on 15 February 2010.
The obligations imposed by this Act primarily concern the CEO, who must assess whether an application meets the core criteria for a TCO (section 269C). Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested party to submit any reasons why the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received. Additionally, the CEO must ensure that the TCO is registered on the day the application is lodged (subsection 269S(1)). This process was followed for the internal combustion engine valves, with TCO No. 1007947 coming into force on 15 February 2010.
Any breaches of the provisions set out in the Customs Act 1901 can lead to various consequences. While the specific Act does not outline penalties for non-compliance with TCOs, general provisions in the Customs Act 1901 include potential criminal penalties for false statements or misleading information provided in connection with customs matters. The maximum penalties for such offences can include fines and imprisonment. Furthermore, under the general administrative framework, failure to adhere to the stipulated procedures could result in civil consequences such as fines or other financial penalties, depending on the nature and severity of the breach.
In summary, Tariff Concession Instrument No. 1007947 facilitates the application process for tariff concessions under the Customs Act 1901, ensuring that eligible goods receive a reduced customs duty rate. The CEO is responsible for assessing applications, publishing notices, and issuing TCOs as appropriate. While specific penalties for breaches are not detailed in the Act, general provisions under the Customs Act 1901 include potential criminal and civil penalties for non-compliance.